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1994 Supreme(Gau) 133

GAUHATI HIGH COURT
J.N.Sarma, J.
Namburnadi Tea Company Limited -Appellant
Versus
Assam State Electricity Board -Respondent
Civil Rule No. 2234 of 1988
Decided On : 08-07-1994

Advocates Appeared:
N.N.Saikia , M.Hazarika

The court held that the ASEB was not authorized to demand surcharge as it had failed to comply with the Terms and Conditions of Supply, 1988, by not submitting bills monthly and by allowing the petitioner to pay the outstanding amount in installments.

Headnote:

ELECTRICITY - TERMS AND CONDITIONS OF SUPPLY - SURCHARGE - VALIDITY - DELAYED PAYMENT - INTEREST - REASONABLENESS - ARBITRARINESS - AUTHORITY TO DEMAND - COMPLIANCE WITH TERMS AND CONDITIONS - BILLING AND PAYMENT SCHEDULE - VIOLATION - CONSUMER RIGHTS - PROTECTION - COURT'S INTERVENTION.

Fact of the Case:

The petitioner, a tea company, challenged the imposition of a surcharge of Rs. 40,490.43 by the Assam State Electricity Board (ASEB) for delayed payment of electricity bills. The petitioner argued that the surcharge was unreasonable, arbitrary, and unauthorized, as the ASEB had failed to comply with the Terms and Conditions of Supply, 1988, by not submitting bills monthly and by allowing the petitioner to pay the outstanding amount in installments.

Finding of the Court:

The court held that the demand for surcharge was without authority of law and quashed it. The court found that the ASEB had violated the Terms and Conditions of Supply by not submitting bills monthly and by allowing the petitioner to pay the outstanding amount in installments. The court held that the ASEB was not authorized to demand surcharge as the bills were not submitted in time and that the benefit given to the petitioner by allowing payment by installments could not be taken away by demanding surcharge.

Issues: 1. Whether the surcharge of Rs. 40,490.43 imposed by the ASEB for delayed payment of electricity bills was valid. 2. Whether the ASEB had the authority to demand surcharge when it had failed to comply with the Terms and Conditions of Supply, 1988.

Ratio Decidendi: 1. The court held that the surcharge was unreasonable and arbitrary as it was not based on any rational system of charging for the supply of electricity. 2. The court held that the ASEB was not authorized to demand surcharge as it had failed to comply with the Terms and Conditions of Supply, 1988, by not submitting bills monthly and by allowing the petitioner to pay the outstanding amount in installments.

Final Decision: The court allowed the petition in part and quashed the demand for surcharge of Rs. 40,490.43. The court also directed that the payment of Rs. 20,000/-, if made by the petitioner vide order dated 14.12.88 of the court, shall stand adjusted against the future bill of the petitioner.

This application under Article 226 of the Constitution of India has been filed with a prayer to quash the impugned bill and letter, Annexure B and D, declaring clause 18(c) of the Terms and Conditions of Supply 1988 of Assam State Electricity Board as ultra vires and with a further direction not to give effect the said impugned bill and letter (Annexure B and D).

2. Annexure B is a provisional bill dated 29th November, 1988 and the challenge is with regard to the amount of Rs.40,490/- which is charged as surcharge in the shape of interest.

3. Annexure D is a letter dated 30.11.88 issued by the Superintending Engineer, Jorhat Electrical Circle, Jorhat by which the time was extended for payment upto 10.12.88 and it was stated that failing to clear the bill within the date mentioned above suitable action may be taken to disconnect the power supply to the premises of the consumer as per Rules.

4. The brief facts are as follows : The petitioner is a tea company and applied to the respondents for supply of electrical energy and the respondents after due verification and all necessary tests sanctioned a load of 213 KW. It is alleged that the respondent No. 3 i.e. the Superintending Engineer, Jorhat Electricity Circle of ASEB did not issue the bill every month nor there was any reading of the meters installed in the petitioner's aforesaid tea estate. The respondent No. 3 instead of issuing monthly bill for the electrical energy consumed, issued consolidated bills for electrical energy consumed over a period of several months. That all of a sudden vide bill No. 4126 dated 9.1.88, the respondents demanded an amount of Rs. 2,54,673.79 for the period from April, 1986 to November, 1987. As the petitioner was not responsible for accumulation of huge amount, the petitioner made an application for payment by instalments. The respondent No. 2, Sub-Divisional Officer, Bokajan Electrical Sub-Division vide order No. 87 dated 4.4.88 was pleased to defer the last date of payment and allowed the payment of the aforesaid sum in 4 (four) instalments in the following manner :

(i) The first instalment of Rs.65,OuCO/- was to be paid on 7.4.88. (ii) The second, third and fourth instalments of Rs. 65,000/-, Rs. 65.000/- and Rs.59,000.79 respectively was to be paid along with the next three subsequent bills.

5. The due date of payment was deferred. The aforesaid sum of Rs. 2,54,673.76 in four instalment were paid by the petitioner and the receipts were also issued. That the respondents instead of issuing monthly bills as per procedure continued to raise the consolidated bills for the electricity consum­ption over a period of several months thereby putting the petitioner in great financial difficulty. All of a sudden the respondent No. 3 vide Bill No. 4154 demanded from the petitioner a sum of Rs. 1,24,212/- which was inclusive of tariff from 31.8.88 to 5.11.88 and interest of Rs.40,490.43 was charged at the rate of 5% per month ie 60% per annum to be paid within 29.11.88 ie Annexure B to the writ application. The petitioner made protest regarding the charge of interest of Rs.40,490.43 as the petitioner paid the bills within the date stipulated by the respondents. On enquiry, the petitioner found out that the respondents charged a penal interest of 5% per month ie 60% per annum on the payment of Rs.2,54,673.79 which as per the order of the respondent the petitioner paid in four instalments and within the date stipulated by the res­pondents. The petitioner made protest against the demand for payment of this amount of Rs.40,490.73. However, by Annexure D letter dated 30.11.88, the respondent No. 2 instead of withdrawing the panel interest of Rs.40,490.43 stated that in the event of failure to clear the bill No. 4154 within 10.12.88 suitable action will be taken to disconnect the power of supply to the petitio­ner's premises. The petitioner made protest again and again but with no effect. Hence, this writ application.

6. At the time of admission on 14.12.88, the peti










































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